Delivering Value in a Multi-Platform World

ADOTAS – If there is one thing I learned after spending several days at Digital Publishing Summit 2011 in Deer Valley, Utah, it’s that the people in this industry really love what they do. It’s not easy walking past world-class spring skiing in what is arguably the United States’ best ski area to enter a dim conference room to listen to a speech on “Auto-nomous Data Management,” but every session played to an SRO crowd of media and technology executives.

The crowd was a veritable who’s-who of the “Digital Display Advertising Landscape” (LUMA) map, so I suppose you could argue that these guys got where they are today by skipping lots of fun, and building advertising and media technology instead.

Among the highly informative (albeit sometimes sales-y) content at the conference, there were some gems to be had. So, here is DPS 2011, organized by quote:

“Value is shifting from those that produce the content, to those that deliver the experience of consuming it.” – Saul Berman, IBM

Saul Berman’s keynote address touched upon the disruption happening in our space, but even the overhyped keyword “disruption” doesn’t touch upon the true chaos happening as publishers learn how to navigate the through all the new social media, exchange-based sales, and various technology partnering opportunities out there.

Do you make Facebook Connect your friend (as Kristine Shine from PopSugar Media does) to drive new unique visits and build your audience? According to Shine, for her organization, the call was to “go all in” with Facebook. For others, like Todd Sawicki, CRO of Cheezburger, Facebook can kill publications by migrating all of their native traffic (like message board comments) to their environment, without returning the favor.

For publishers, the challenge is not just continuing to produce quality content, but to make it for a multi platform world, where consumers are just as likely to value the way they are consuming it. That means having a multi-platform approach—and a multi-revenue approach as well. Why does a full song from iTunes cost $0.99, but a 10-second sliver of that song, sold as a ringtone, cost $3.00? In that case, it is the application of content in a clever way that adds value, a nice use case for anyone monetizing content in an experiential way.

“Media will be sold like pork bellies” – Frank Addante, Rubicon Project

There was quite a bit of discussion around pricing at the conference, and the founder and CEO of the Rubicon Project was not wrong in insisting that, without significant changes, media would indeed be as commoditized as the humble pork belly.

Unfortunately, this trend has already happened. Addante was right to highlight the unfortunate fact that the same article in The New York Times commands a $20 CPM in print as opposed to $2 CPM online. That value gap, Addante argues, can be closed by “realizing the true value of digital experiences.”

Rubicon would like to see one big gigantic “open market” that enables the industry to expand the digital advertising pie from $40b to $400b with full participation, but the details were cloudy. If that market concept involves having publishers suddenly not to sell their entire remnant inventory into an exchange, then maybe we can avoid the pork bellies fate.

Addante may be on to something, however. What the industry needs is one trusted third party aggregate high quality inventory, and create value around it, but that battle is in its very nascent stages.

That being said, a good bit of the conversation was around pricing. Both Saul Berman and Tim Cadogan of OpenX deployed the airline pricing scenario, to argue for dynamic pricing models. For Cadogan, three levels of inventory equate to three levels of seating: Exclusive (first class), Premium Guaranteed (business class), and Non-Guaranteed (coach). Just as airlines frequently change the configuration of their seating to account for their routes, seasonality and passenger mix, so must the industry dynamically price inventory, based on its placement and value.

The OpenX Enterprise server hopes to achieve that by putting guaranteed and real time exchange inventory into the same platform, and use smart decisioning technology to maximize yields. A very smart idea.

For Berman, it was not only about “having five different passengers, paying five different prices,” but also about exploring entirely new revenue models, like Apple did in “switching the razor blade model” with the iPhone (expensive “razor,” cheap “blades”). Publishers must go beyond monetizing their content through advertising, and start looking at generating revenue from the larger ”marketing” bucket. Right now, that is called “selling apps.”

Truer words have never been spoken. Klotz explored some recent survey data which asked publishers and advertisers how the way they are buying media is shifting. The results were fairly predictable: more and more budget is finding it’s way into real-time bidding environments, as brand and direct marketers seek new ways to target their desired audiences.

That’s nothing new. What is changing rapidly, however, is that all marketers are demanding more placement control, increased transparency, and brand safety. Brands want the same direct connections with publishers they have enjoyed with guaranteed buying, with the ease and cost efficiency of exchange-based buying. The takeaway? If you are a publisher and not looking at building private exchange connections with your demand side partners, you are in trouble.

That sentiment was hinted at in a panel called “Selling in a Cluttered Market.” For Jonas Abney of Hachette Filipacchi, “general content gets beaten by specific content every time.” Marketers are looking for laser-focused, topical content that captures user intent, rather than more generalized content.

Moreoever, today’s advertising sale is more educational than ever. For panelists like AdMeld CEO Michael Barrett and PubMatic’s Andrew Rutledge, a sales force cannot simply have media experience–they have to know the ecosystem, and be prepared to add value by educating clients.

For Whitepages VP of Sales Craig Paris, it is simple math: Agencies get more than 100 unique sales calls a month, from an increasing amount of new technology and media companies. Unless you differentiate yourself, you are not going to win business. “Thirty percent of your day should be spent reading the industry trades so you can have credibility, and provide insights to your customers.”

“Nielsen says people visit 2.9 sites a day, and one of them is Facebook” — Greg Rogers, Pictela

Last minute speaker Greg Rogers of Pictela provided some insights on how premium advertising units (specifically the new IAB 300×1050 “Project Devil” unit from AOL) can drive user engagement. If the above quote is true, it means that brands have to find a way to engage the user more deeply on the the sites they visit every day, and that way is through interactive units.

Rogers has data that points to “dramatic” CPM increases from premium RM units, and makes a case for replacing three 300×250 units with the single 300×1050 “devil” slot. Patch and Huffpo have seen great results, and advertisers are getting good engagement and plenty of reporting.

Highly premium, brand-safe, engaging advertising… sounds like something from the past called “premium guaranteed.” I bet PopSugar’s Shine would agree. She has built a virtual in-house agency to build premium campaigns for her customers, and demands ”150% control over every ad unit on the page.”

“Cookie Targeting Doesn’t Scale” — Michael Hannon, Aperture

Sort of a dark horse moment for me was Michael Hannon’s first slide, which threw down the gauntlet on cookie targeting. All the energy in the space for the last several years has been about targeting using third-party data .

But what if it doesn’t work? This is the 900-pound elephant in the ecosystem. Not only have many marketers had difficulties achieving significant scale when overlaying data on top of exchange buys, but the legislative tsunami of “Do Not Track” threatens to reduce that scale even further. Hannon makes an elegant argument for real audience measurement, and doing so in a cookie-less way.

That leads me to a great conversation led by Alan Chappell, a lawyer specializing in just these types of issues. In a room full of ad publishing and ad technology executives that depend on using data to identify target audiences, there was a great deal of confusion regarding how our industry is getting on top of what may be a very severe problem.

More direction from the IAB in the form of specific self-regulatory principles and mandates is needed, and needed fast. For Chappell, inaction may cause the “privacy disaster, which enables Google, AT&T, and Facebook to own all the data,” leaving the rest of the industry on the side.

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Chris O’Hara is SVP of Sales and Marketing for TRAFFIQ, and heads up its publisher development practice. He has been in the digital media space since 1995, having worked for Reed Elsevier, Nielsen, and Mediabistro. He is also the author of six popular gift books, including Great American Beer (Random House). He may be reached at cohara@traffiq.com.